What would happen to your RV plans if the price of fuel were to rise dramatically?
In the Spring of 2008 I paid almost $5 a gallon to fill up my motorhome. I was not mentally prepared for the sticker shock at the pump. All my life a gallon of diesel fuel cost less than a gallon of regular gas. When I decided to become a full-time RVer and purchased a diesel pick-up to tow a mammoth 5th wheel, diesel prices switched places with regular gas overnight. I'm just lucky that way.
There were many reasons for the increased fuel prices in 2008. I discussed them in two articles at that time which you can read here: RVers wonder why diesel prices are so high and RVers could see fuel at $8.00 a gallon in 2009. Thankfully $8.00 a gallon didn't happen, and looking back, we see that speculators contributed significantly to the rising cost of fuel at the pump.During that time of high fuel prices we saw a pull-back in both auto and RV usage. Since most RV travel involves discretionary spending, RV usage was curtailed. Many RVers saved on fuel costs by restricting their RV travel and camping close to home. Others just stopped RVing altogether.
Hardcore RVers just had to bite the bullet and increase the fuel budget allocation. The big question is, at what price point will fuel costs be prohibitive for the majority of RVers?
There's been a lot of talk lately about "Peak Oil." I didn't pay much attention at first, but I kept seeing the concept crop up in economic reports. The basic idea of Peak Oil is that we have reached the zenith of oil production worldwide and soon demand will outstrip production. In other words, we are running out of gas! I hope this idea is not true and that we enjoy cheap fuel forever.
It does concern me, however, when even the Obama administration has publicly recognized the threat. Glenn Sweetnam, the Obama team oil market expert doesn't like to call it "Peak Oil," preferring the terminology "undulating plateau" instead. It's the same thing, but you know how politicians love to "sugar coat" problems with less threatening sounding labels. He is clearly worried about whether we have enough reserves and production left to power us into the future. You can read the complete article in Le Monde.
The chart below came from a Department of Energy round-table meeting last April and shows we are rapidly approaching the downside of oil production. The chart tells us that in five years we will need to fill the gap with at least 10 million barrels of oil production a day. To give you an idea of how much that is, Saudi Arabia (the top oil producer in the world) produces only 10.8 million barrels a day. How are we going to fill that gap? From where is the oil going to come for future use? Liquid sands? Coal gasification? New exploration? All expensive propositions.
Wherever new oil comes from it will be expensive because it will cost more to produce. This translates into higher prices at the pump.
RV implications: Plan for higher fuel costs in the future (if they don't materialize you'll have extra cash). If you are considering becoming a full-time RVer you better hurry and take advantage of affordable fuel prices while they last. If you want to keep RVing into the future consider lighter more fuel efficient RVs. Plan to stay closer to home on future RV vacations. Look for ways to offset fuel costs like utilizing free camping or reduced rate campground programs. Use the internet to shop ahead for the cheapest fuel sources along your route of travel.
Staying on top of the undulating plateau - Jim Twamley, Professor of RVing